How consumers are willing to pay for low-carbon products? – Results from a carbon-labeling scenario experiment in China

Abstract

Carbon labeling has been recently developed to lead the public towards lower carbon consumption in an attempt to create a low-carbon economy. By identifying the greenhouse gas emissions produced during the full life cycle of a product, carbon labeling can affect the behavior of the consumers who purchase low-carbon products. Based on data from a carbon-labeling scenario experiment conducted by the research group in six cities throughout China, we adopted the Dunnett's T3 test approach for single factor variance analysis to find the differences in consumers' willingness to pay for low-carbon products between different types of consumers. Then, we used a logistic regression model to analyze the relationship between the consumers' willingness to pay and their demographic variables. The results indicate: (1) significant differences exist in the willingness to pay for low-carbon products for different consumers, and (2) education level and monthly income significantly impact consumer willingness to pay. Based on these findings, we proposed relevant policy implications.